Over the past few years, India’s leather capital has been shifting downstream the Ganga—from Kanpur to Kolkata. Once the hub of the country’s leather industry, the Uttar Pradesh town has had to gradually cede that distinction as cow vigilantism in the state made the transportation and slaughter of cattle increasingly difficult, which, in turn, dealt a blow to the leather trade. So, when Iqbal Naaz, the regional chairman of the Council for Leather Exports and owner of the Kanpur-based Naaz Exports Private Limited, met West Bengal chief minister Mamata Banerjee during a stopover in Milan in September 2018 en route from a business trip to Italy and Germany, he wondered whether his government could provide him land in West Bengal to expand his unit. Shortly afterward, at the Bengal Global Business Summit in February 2019, Mamata issued a notification inviting applications for land in the sprawling 1,100-acre Kolkata Leather Complex (KLC), located in the eastern fringes of the city in Bantala, and touted to be “ South Asia’s biggest integrated leather hub”.
Bengal, it seems, is ideal in terms of land availability and cost, as well as in the facilities offered by the government. “Land cost Rs 30,000-40,000 per square meters in Jajmau and Rs 10,000-15,000 in Unnao,” says Naaz. “At KLC, it was only Rs 2,800 per square metres.” Not just that, capacity in the leather clusters in Kanpur, Jajmau and Unnao are full. The CETPs (common effluent treatment plants)—essential for treating the immensely hazardous chemical effluents released from tanneries—there too are functioning over the optimal level.
More than anything, however, it was vigilante attacks by cow protection groups in UP and the closure of many slaughterhouses by the state government in 2017 that made the environment for the leather industry unconducive for business. The row over cow slaughter forced the closure of 150 out of 400 tanneries at the country’s biggest leather hub at Jajmau, a suburb of Kanpur. Then, three months before the Kumbh Mela in January 2019, the Uttar Pradesh Pollution Control Board passed an order asking tanneries to shut down for three months to stop the discharge of effluents in the Ganga. Hundreds of tanneries closed down, and foreign contracts canceled. As tannery owners turned to Pakistan and Bangladesh for raw material, manufacturers started looking to Kolkata to move or open new production units. The reasons? A metropolis with an airport and access to a port, cheap labour, but mostly government sops and attractive land rates at the KLC.
Leather being put out to dry at the KLC; (Photo: Debajyoti Chakraborty)
“There were several hundred tanners asking for land,” says Naaz. “But Didi chose only those who were serious about the leather industry, not those who were looking to use it for other purposes,” he says.
Indeed, the West Bengal government has been serious about giving the labour-intensive leather industry a big push by scaling up infrastructure, upgrading effluent treatment plants and promising a conducive environment. It was not a surprise, therefore, that many Kanpur tanners started contemplating setting up new units at KLC.
Their endeavours, however, were rudely interrupted by the Covid-19 pandemic, and the debilitating lockdowns that accompanied it, having a crippling effect on the industry and slowing down the entire process of the actual physical relocation from Kanpur. As matters stand, over 30 tanners from the city have been allocated space in KLC and are in the process of moving in, with their units in various stages of construction.
Cow vigilantism, the closure of slaughterhouses in 2017 and of tanneries in 2019 forced UP’s tanners to look for alternative business locations. the infrastructure at KLC met their needs
“We took possession of land only a few months backit was delayed mainly because of Covid and for upgradation of the CETP plant. The building plan is ready. I am hoping to start production within two years,” says Mukhtarul Amin, a tanner from Kanpur who is setting up his fourth unit in the leather industry. Amin is planning to invest Rs 15-20 crore in this expansion. Like Amin, around 20 tannery owners with units in UP are keen on expanding operations with new units in the KLC. In all, the businessmen from Kanpur are likely to bring in over Rs 400 crore in investment.
Now home to some of the biggest names in leather export, KLC has an annual turnover of Rs 15,000 crore and exports products worth around Rs 7,500 crore. This, too, makes it an attractive destination for investors from Kanpur and Chennai.
KLC’s success, though, has come the hard way, and after almost a quarter of a century. A brief rewind to its journey may perhaps help put things in a better perspective.
A shakey start
The year was 1997. The country’s apex court had ordered the shifting of 538 old, polluting tanneries from Kolkata to a self-contained zone with effluent treatment facilities. The complex was conceived at Bantala. ML Dalmiya & Co Ltd, owned by the late Jagmohan Dalmiya (the former BCCI president), won the bid and got 1,100 acres of land on lease. As a BOT (Build Operate Transfer) partner, he was to develop the land for the relocated units by 2002 as per the Supreme Court order. However, the developer kept on missing deadlines. Even for the installation of a basic CETP, mandatory for running tanneries, the government had to eventually step in. The CETP was commissioned in 2004 and the first tanneries began moving in from 2005.
The complex was a picture of desolation in those days. Imran Ahmad Khan, the general secretary of the Calcutta Leather Complex Tanners Association, who had invested Rs 7 crore in 2000, was shocked when he returned from Australia in 2013. Other than the four modules of CETP, which had thecapacity to treat 20 MLD ( million liters a day), there was practically nothing for tanners.
“We were just paying EMIs for our investment. Those days, the complex had no streetlights, no drinking water facility. Even HDPE (high-density polyethylene) pipelines for the transportation of toxic effluents from tanneries to the CETP had not been laid. Instead, brick sewers and inferior RCC (reinforced concrete) pipelines were hastily laid, which led to serious pollution,” says a tannery owner who has had a unit in the KLC since its inception. The dumping of solid waste also led to nearby villages complaining of fish dying in ponds, vegetables rotting away in fields and sundry health hazards.
With sparse security inside a largely empty complex, tannertionists of harassment by extortionists—all valid reasons for the close to 600,000 people directly or indirectly associated with tanneries to blame the government and the developer alike.
Some 187 new tannery owners are looking to invest Rs 4,000 crore and creating one lakh direct jobs in the bargain
Furthermore, there were no sewerage treatment plants (STPs) for around 50 leather goods manufacturing units that had clubbed together under the Indian Leather Products Association. There was scarcely any provision for drinking water, and reservoirs needed for washing leather were constructed without water pumping stations. The KLC was an embarrassment.
But the greatest handicap facing the KLC was the inadequate number of CETPs. For the highly polluting industry that is the leather business, they are an absolute must—actually considered as important as anything in a leather industry hub. Consequently, there were raps for allowing tanners to operate without adding to the capacity of CETPs to treat waste water. Instead of the proposed six CETP plants with a capacity to treat 30 MLD of effluents, the complex only had four CETP modules with the capacity to treat only 20 MLD.
In its first-ever environment audit in 2010-2011, the Comptroller and Auditor-General criticized the government in the strongest terms: “The project failed to achieve its stated objective of ensuring safe disposal of industrial effluents and solid waste from tanneries causing immense damage to the environment.”
The gathering force of negativity around the KLC, combined with a need to generate employment and attract investment, forced the state government to act. The wheels started turning the other way around in 2015.
Bit by bit, infrastructure was improved, outstanding problems resolved. Three pumping stations with a capacity of 90,000 liters of water a day for washing leather were put in place. The matter of disposal of hazardous solid waste was also taken care of, with West Bengal Waste Management Ltd agreeing to transport 100 tonnes of waste every month to Haldia, a port city 120 kms south of Kolkata.
But the greatest difference came when four more modules of CETPs with the additional capacity to treat 20 MLD of effluent waste started operating in March 2022. While inaugurating them, Mamata said, “With eight CETPs, the only leather complex in the world to have such a capacity, KLC will attract investment worth Rs 80,000 crore and employ five lakh people.”
Armed with this 40 MLD capacity, KLC is now ready to open its doors to the 187 new tanners who had already bought land in 2018 and were unable to shift because of inadequate effluent treatment capacities. Out of these tanners, around 30, among them Mukhtarul Amin, are from Kanpur and Chennai.
Now that KLC is up and running, other initiatives too are being taken up. The sludge, flesh and waste of the leather are being used for generation of electricity in a bio-gas plant as a pilot project. Along with SWITCH-Asia, a sustainable consumption and production programme, the KLC is extracting tallow oil for making tiles with 60 tonne weight-holding capacity. A secure land fill area spread over 51 acres is being prepared to store sludge and leather waste for manufacturing byproducts such as leather boards, paver tiles and sandals.
Big Names In KLC
Once their production units are up, Kanpur’s tannery owners can readily benefit from the top manufacturing units that have set base in KLC. Vinit Gloves, with an annual turnover of Rs 100 crore, is a top exporter and is looking to set up a second unit. New Horizon, Trio Trends, Kompanero and ASG leather are all luxury brands with large footprints in the business and a presence in KLC.
The cost of labor—big units pay Rs 15,000-18,000 a month—too is favorable for UP’s tanners. Wages of casual laborers are also cheap.
The promise of employment for 500,000-600,000 people also seems doable. According to Imran Ahmad Khan, for each crore invested in the industry, a minimum of 15 jobs are created. “This is central government statistics. So, if the new 187 tannery units are putting in an investment of Rs 4,000 crore, one can assume one lakh direct employment won’t be too hard to generate,” he points out.
That’s a figure to be proud of. But giants from UP’s leather belt—Super House, Pacific, Naaz and 15 others from Kanpur—have also taken a shine to Kolkata’s leather hub. They have promised Mamata Banerjee investment worth Rs 5,000 crore.
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